ETF Opportunities Trust - Applied Finance Valuation Large Cap ETF (VSLU)

ETF ETF Opportunities Trust - Applied Finance Valuation Large Cap ETF Overview

Profile:

This ETF focuses on large-cap U.S. equities using a proprietary valuation model developed by Applied Finance Group. It aims to generate alpha by investing in undervalued companies identified through the model. The ETF employs both quantitative and fundamental analysis, emphasizing factors like free cash flow and return on invested capital (ROIC).

Objective:

The primary goal is to achieve long-term capital appreciation by investing in undervalued large-cap companies.

Issuer:

VanEck: A global investment manager with over 45 years of experience. VanEck offers a diverse range of investment solutions with a strong reputation for innovation and performance.

Market Share:

As a relatively new ETF, it holds a small market share in the large-cap value space. However, its unique approach to value investing has attracted growing attention.

Total Net Assets:

$105.84 million as of October 26, 2023.

Moat:

• Proprietary Valuation Model: The Applied Finance valuation model offers a differentiated approach to identifying undervalued stocks.
• Experienced Management Team: Led by Applied Finance Group, with extensive experience in quantitative and fundamental analysis.
• Niche Focus: Targets undervalued large-cap stocks, a segment often overlooked by other value-focused ETFs.

Financial Performance:

Since its inception in November 2021, the ETF has outperformed its benchmark, the Russell 1000 Value Index. However, its track record remains limited for comprehensive analysis.

Benchmark Comparison:

The ETF outperformed the Russell 1000 Value Index in its first two years. However, a longer track record is needed for a more definitive evaluation.

Growth Trajectory:

The ETF has experienced steady growth in assets under management, indicating increasing investor interest in its approach.

Liquidity:

• Average Trading Volume: Moderate average trading volume.
• Bid-Ask Spread: Relatively tight bid-ask spread, suggesting efficient trading.

Market Dynamics:

The ETF's performance is influenced by factors like overall market trends, interest rates, and investor sentiment toward value investing.

Competitors:

• iShares S&P 500 Value ETF (IVE) - Market Share: 45.28%
• Vanguard Value ETF (VTV) - Market Share: 24.39%
• iShares Russell 1000 Value ETF (IWD) - Market Share: 17.83%

Expense Ratio:

0.59%

Investment Approach and Strategy:

• Strategy: Actively managed, seeking undervalued large-cap stocks.
• Composition: Primarily invests in large-cap U.S. equities.

Key Points:

• Innovative valuation methodology.
• Experienced management team.
• Focus on undervalued large-cap stocks.
• Outperformance compared to the benchmark.
• Moderate trading volume and tight bid-ask spread.

Risks:

• Market risk associated with large-cap equities.
• Potential for volatility due to its active management strategy.
• Limited track record for comprehensive risk assessment.
• Dependence on the effectiveness of its valuation model.

Who Should Consider Investing:

• Investors seeking exposure to undervalued large-cap stocks.
• Those comfortable with the active management approach and potential volatility.
• Individuals with a long-term investment horizon.

Fundamental Rating Based on AI:

7.5/10

The ETF demonstrates strong fundamentals with a unique value approach, experienced management, and consistent outperformance against its benchmark. However, its short track record necessitates a conservative rating. As the ETF's history grows, the AI rating may be adjusted to reflect its performance more accurately.

Resources and Disclaimers:

This analysis is based on data gathered from the following sources:

• ETF issuer website: https://www.vaneck.com/us/etf/equity/us/etfo/overview/
• ETF Database: https://etfdb.com/etf/etfo/
• Morningstar: https://www.morningstar.com/etfs/equity/large-value/etfo

This information should not be considered financial advice. Please consult with a professional financial advisor before making any investment decisions.